Access to the copper-pair

My post on privatising the copper-pair got a solid reaction with comments ranging from the ‘let’s try it’ to the ‘surely it isn’t practical.’ Well, the nay sayers have walked nicely into my trap (I think we can do the same thing even easier). Actually, their chief objection to my first proposal should have been this: we already rent and use the copper-pair, what good would it do to have us own it?

Well, Telstra are dealing with competitors as if we haven’t really paid for it already. They want to sell that rental to the Optus’s of the world and then have Optus deal with us. This is the ULLS access issue currently occupying the ACCC’s attention (and I am working for them on this one).
But doesn’t all this suggest something simpler? Telstra rent us a line at a rate that is nominally regulated. It is unlikely we will do much better elsewhere especially if Telstra have their way on ULLS pricing. So what if we just keep it that way but redefine what renting the line from Telstra means. Rather than, if we pay Telstra we have to buy other stuff from Telstra, why not, we pay Telstra and then if an Optus wants to sell us local call service or ADSL using that line, they don’t deal through Telstra they just come to us. Then, from some very small switching fee, we tell Telstra what we want to do with the line and then we do it. We cut out the middleman — Telstra.

Think of it. Telstra gets to rent lines like they want to do and that stays regulated. Optus and others can compete for us and they don’t have to deal with Telstra. And we have the right to use the line we are renting (and paying Telstra to maintain as working through the exchange) any way we want.

It isn’t privatisation but it puts the right person in charge; the customer. And it does the job of removing Telstra and with them the regulator back to the sidelines.

3 thoughts on “Access to the copper-pair”

  1. From my understanding cable internet in the ACT works in a similar manner to what you’ve suggested.
    TransACT offer connections to their city-wide network for a monthly rental fee, but then you need to purchase access to the internet on top of that (at your desired download/upload speed and data volume). This service can be purchased from TransACT itself or any of its competitors.

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  2. Another solution would be to split off Telstra’s exchanges and last-mile copper into, let’s call them “Regional Copper Companies” or RCCs. These would be government-owned, not-for-profit, and would outsource all the actual maintenance to competitive tender. Carrier access to the copper would be free – all costs would be borne by the end-user via their line-rental fee. There would probably be explicit subsidies between metropolitan and rural RCCs.
    Of course this would mean the government loses most of its expected T3 windfall because it ends up holding the not-for-profit bits. I suppose they could fix that by piling up the RCCs with debt.

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